The East and West coasts have historically been the center of tech startup activity in the United States. . However, there is growing interest in innovation hubs in the middle of the country, especially as the high cost of coastal living is ever more prohibitive to many young entrepreneurs.
One such effort to cultivate Midwestern tech talent is Powderkeg, the Indianapolis-based “community-as-a-service” website connecting the tech community’s investors, founders, and professionals in 10 cities, including five in Indiana; Raleigh-Durham, NC; Nashville, TN; Kansas City, MO; Denver; and Cincinnati. (The Denver location will open officially next month.)
Powderkeg, which has more than 10,000 members across the country, is designed to help tech startups access the resources they need to grow, whether that’s investment capital or mentorship. The organization also holds community events, helps founders hone their investor pitches, and, according to its website, has so far had a role in members raising $576 million in backing funds.
Matt Hunckler, founder and CEO of Powderkeg, says it therefore made perfect sense to team up with Cintrifuse, a Cincinnati startup catalyst. The partnership announcement was made in April, but Hunckler says he’d been watching the organization’s efforts and the growth of Cinci’s tech community for years.
“When Cintrifuse launched and expanded, we tracked it very closely,” he explains. “Being in Indianapolis gave us inroads; Cincinnati and Indianapolis are less than two hours apart. But it was shocking to me that there wasn’t more collaboration.”
Each community has complementary strengths, he adds: Indianapolis has seen more unicorn exits of homegrown companies, like Salesforce’s $2.5 billion acquisition of ExactTarget in 2013 or Angie’s List merging with HomeAdvisor last year, but Cincinnati has the more robust tech scene. In particular, he says Cinci’s Brandery accelerator has produced “class after class of amazing companies.”
Hunckler says Powderkeg’s relationship with Cintrifuse is more of a strategic partnership, with no money changing hands as part of the collaboration. Cintrifuse members will receive a discount to Powderkeg’s platform, and Powderkeg Founder Members now have a Cintrifuse membership, with benefits including venture investor curation, 1:1 funding advice, and matchmaking with potential customers. By combining the efforts of both organizations, he says, they’ll draw more investment capital and tech talent from outside the Midwest.
Powderkeg and Cintrifuse are hosting Fuse50, the first in a series of one-day conferences to “fuse the Middle American tech ecosystem,” on May 17 in Cincinnati.
“It all goes back to what made Boston and Silicon Valley successful,” Hunckler says. “When you look at the data, you see one of the top correlating factors to startup success is density of resources. In Silicon Valley, the density is geographical. What we’re doing is creating density digitally by putting resources together on one platform, creating more connections.”
Powderkeg also provides a path for coastal VCs looking to explore tech communities in the country’s interior. “It’s an easy way for customers and investors on the coasts to have one place to discover and match with innovative Midwestern startups,” Hunckler says. “Historically, we’ve been considered flyover cities. We’re on a mission to create fly-to cities.”
In addition to the Denver location, Powderkeg plans to open two new chapters in 2018, he says. The cities haven’t been announced yet, but Hunckler confirms Detroit is one of the places under consideration.
